Mortgage Casualties On Track for 7-Year Low

Mortgage Casualties On Track for 7-Year Low

DALLAS — (April 15, 2013) /PRNewswire/ This year is on track to see the fewest number of mortgage-related casualties in seven years. First-quarter bank failures were the slowest of any quarter since before the financial crisis. But quarterly credit union casualties exceeded bank failures and climbed to the highest level in a year.

During the first quarter, 15 mortgage-related companies either failed or were closed down. The total is based on failures and closings tracked by Mortgage Daily.

The casualty rate deteriorated from the fourth-quarter, when just 13 businesses called it quits.

But activity has slowed from the first-quarter 2012, when 27 entities went out of business.

Total Closings

The first-quarter total included six non-banks.

Among non-bank activity was Edward Jones Mortgage LLC. The unit, which was a joint venture between Wells Fargo & Co. and Edward Jones established in 1998, was one of several joint ventures dissolved by Wells Fargo.

Other non-bank closings included PowerLink Settlement, which is a joint venture between Homeward Residential and Fidelity National Financial, and foreclosure processor Prommis Holdings.

Also among the obituaries were four federally insured banks. It was the slowest quarter for bank failures since the second-quarter 2008 — when just two FDIC-insured financial institutions were closed down by bank regulators.

In addition, five credit union failures were tracked in the first quarter, exceeding the number of bank failures — though credit union failures tend to involve financial institutions that are much smaller than banks. The last time that this many credit unions closed in one three-month period was the first-quarter 2012, when seven were handed over to the NCUA.

At the current pace, around 60 mortgage-related companies are likely to close this year — fewer than the 83 businesses that shut down in 2012 and the fewest since 2006 — when just 32 mortgage-related operations fell.